Infor's support for Lilly Visual customers

A source inside Infor contacted me regarding a post I wrote earlier this month on open source ERP gaining adherents. His issue is not so much with the main point regarding the growing attraction of open source ERP. Rather, he believes that the eWeek article I referenced misrepresents the experience of Lilly Visual customers since Lilly was acquired last year by Infor.

He writes,

The idea that customers are leaving VISUAL software in droves is absolutely inaccurate. In our fourth quarter in the U.S. alone we sold 50+ new sites of VISUAL. It was an all-time best quarter for us at Infor in general. We still support our VISUAL customers as always through our affiliate channel. That has not changed one bit. The core organizational structure in Hampton, the former headquarters of Lilly, is still intact.

The eWeek article references the opinion of one customer leaving VISUAL. It should also be noted that we came out with release 6.51 in January, and 6.5.2 is coming out September 1st. So those who say that there have been no core enhancements have not looked at the two previous releases. We also continue to add integration for point solutions from other products in the Infor line.

I have not had any recent first hand contact with Visual customers to check their experience with Infor's support since acquiring Lilly Software. I've noted in the past that Visual had built out some nice functionality for lean manufacturing and constraint-based scheduling. I would love to hear first hand reports from customers of Infor's continued support and enhancements to the product.

If you're a Visual customer, feel free to email me or add a comment directly to this post.

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Made2Manage marks sixth acquisition with bid for Intuitive

Made2Manage is adding to its portfolio of discrete ERP systems with its acquisition of Intuitive Manufacturing Systems, announced today. The deal is the sixth for M2M since it went private in August 2003.

Although Intuitive is an old name in small and mid-size ERP, it has been rewritten recently and claims to be now 95% based on Microsoft's .NET framework. It has been on a small acquisition binge of its own, having acquired SupplyWorks, a supply chain management vendor, in March, and Relevant, a specialist in aerospace, engineer-to-order, and MRO businesses, which Intuitive picked up in April.

I'm generally skeptical about the value of a vendor rollup to customers of the target vendor. Too often the new parent either scales back enhancements to improve profitability of the maintenance stream or puts customers on a migration path to some successor system. Made2Manage gets a pass, though, in my opinion. They appear to be running each of these acquisitions as a separate organization, for the most part, but introducing some economies of scale and best practices in sales and support processes.

One source of mine, inside Intuitive, is quite positive about the deal, and I don't think he's spinning me on it.

There's more in the press release on M2M's website.

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Open source ERP gaining adherents

Open source ERP systems--thus far a small slice of the market--are becoming more attractive in light of the rapid vendor consolidation of commercial ERP packages.

At least that's what this eWeek article claims.

The director of operations at Marena Group, a manufacturer for post-surgical garments, [John] Rogelstad had a Lilly Software Associates ERP system in place, but after Lilly was acquired by Infor Global Solutions, he found a dramatic decrease in support. With several big IT initiatives in the pipeline, Marena started to feel uneasy with Infor as a partner. "We felt like since Infor acquired Lilly, they were getting very bureaucratic and disorganized. Our sense was they were more interested in acquisitions than working on their core product or developing a new core," said Rogelstad in Lawrenceville, Ga.

Rogelstad chose OpenMFG, a quasi-open-source system, as a replacement for Infor's Lilly.

The article also highlights implementations of another open source ERP system, Compiere, at Pertronix, in San Dimas, CA, and at e-BuckMail.com, in Hudson, WI.

Although open source applications, especially enterprise systems such as ERP, are not as widely implemented as open source infrastructure software, such as Linux and Apache, the trend does seem to be increasing. Clients used to point to the assurance that commercial software vendors stood behind their products, promising support and investment in R&D. But with the acceleration of vendor consolidation and the sunsetting of products, those assurances aren't what they used to be.

The continuity of support for open source systems, which depend on a network of interested parties, starts to look like a more attractive model.

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IT budgets as percent of revenue at highest level since 1997

After six months of work at Computer Economics, we've now released our 17th annual IT spending and staffing study, and the findings are quite interesting.

We found that median corporate IT spending across all industry sectors in the U.S. and Canada has now reached 2% of sales, the highest level this metric has shown since 1997, during the build-up to Y2K, when it hit 2.2%.

The 2% ratio this year is an increase from 1.7% in 2005, as shown in Figure 1.

Effectively, the growth in IT spending as a percent of revenue means that IT budgets are increasing faster than corporate sales. This is confirmed by the study, which shows that the median growth in IT spending on a dollar basis across all respondents this year is 4.1%, outpacing the 2005 U.S. GDP growth rate of 3.5% in 2005.

So what are companies spending all this money on? Our study finds IT staff is not at the top of the list. Although there are more companies adding IT staff than cutting headcount, the median increase in IT staff this year is only 2.0%, about half the rate of the increase in IT spending.

The study found that IT spending growth is strongest in business services, where it shows a 9.7% increase over last year, followed by healthcare, pharmaceuticals and medical devices, retail, and banking and finance organizations. Weakest growth, though still positive, is seen in the process manufacturing, utilities/energy, and wholesale distribution sectors.

The Computer Economics IT Spending, Staffing, and Technology Trends study, now in its 17th year of publication, provides dozens of additional ratios and other metrics for the composite sample, by organization size, and by industry sector. Statistics include benchmarks for IT operational budgets, IT capital budgets, IT staffing, technology adoption rates, ROI and TCO, and outsourcing utilization.

The study is available for purchase from the Computer Economics website.

A FREE 34 page executive summary is available upon request.